Carbon Diary: Robin Hood to rescue climate?

Is the Robin Hood Tax on banks’ transactions the key to the $100 billion a year the UN promised developing nations in its Copenhagen Accord? Last December, the UN said new funds on this enormous scale are needed annually to satisfy the needs of developing countries for low carbon technologies and to adapt to climate change impacts that we, the developed nations, have set in train.

When the UN called for “Scaled up, new and additional, predictable and adequate” resources, many supposed its arrow was aimed at the banks, to help seal the Copenhagen Accord. This is the Accord’s commitment – paragraph 8:

“Developed countries commit to a goal of mobilizing jointly USD 100 billion dollars a year by 2020 to address the needs of developing countries.”

But it gets a bit woolly on delivery:

“This funding will come from a wide variety of sources, public and private, bilateral and multilateral, including alternative sources of finance,”

…the Accord says. But their eye was on the main prize, the transaction tax. A secondary source could be taxing revenues from the carbon market – the billions involved buying and selling carbon permits to industry. But as things stand, in the aftermath of Copenhagen and with a recession on, the CO2 market is dead flat. CO2 is selling at a mere 13 euros a tonne. It’s below the level need to push serious investment in low carbon alternatives to fossil fuels.

And least developed nations may welcome the UN’s commitment that,

“Funding for adaptation will be prioritized for the most vulnerable developing countries, such as the least developed countries, small island developing States and Africa.”

The UN wants the cash to flow into a Copenhagen Green Climate Fund. The idea has its origins in the Commonwealth Summit, November 2009, when Gordon Brown proposed a £10-billion launch fund to

“deliver funds to poorer states on a payment by results system, under which those which showed they were taking action to halt climate change would receive more cash”.

With climate change still in post-Copenhagen resusc, the Robin Hood Tax could provide just the boost we need.

Written by Philip Pearson

Philip is a former Senior Policy Officer in the TUC’s Economic & Social Affairs Department, working on issues around climate change, energy and transport.